Bogus Theories, Bad for Business

The Wall Street Journal has a book review of The Management Myth by Matthew Stewart. The book flushes out the ideas Matthew Stewert explored in a previous article in the Atlantic about the failure of management to mature as a discipline.

Mr. Stewart quotes Bruce Henderson, the founder of the Boston Consulting Group, who describes consulting as “the most improbable business on earth” and who goes on to ask: “Can you think of anything less improbable [sic] than taking the world’s most successful firms, leaders in their businesses, and hiring people just fresh out of school and telling them how to run their­ businesses, and they are willing to pay millions of dollars for their advice?”

I’m not sure about the book, I have not read it but that is a great statement. And I firmly believe managers need to become experts at managing and by and large they have quite a long way to go. Dr. Deming talked about how we “know” what we know in the aspect of his management called the theory of knowledge (which is not included in any other management philosophy I have seen). That area (with interactions in other areas) explores why people often believe what is not so. And management seems to have a surplus of beliefs that are not based on sound theories.

Read this good article I have mentioned before on this topic by Carlie and Christensen: The Cycles of Theory Building in Management Research [the broken link was removed].

Related: Righter IncentivizationAnother Quota Failure ExampleManagement Advice FailuresWhy Extrinsic Motivation FailsInnovation StrategyDoes the Data Deluge Make the Scientific Method Obsolete?Data Based BlatheringDoing the Wrong Things RighterHarvard’s Masters of the Apocalypse

From the Atlantic article:

Each new fad calls attention to one virtue or another—first it’s efficiency, then quality, next it’s customer satisfaction, then supplier satisfaction, then self-satisfaction, and finally, at some point, it’s efficiency all over again.

or companies, M.B.A. programs can be a way to outsource recruiting. Marvin Bower, McKinsey’s managing director from 1950 to 1967, was the first to understand this fact, and he built a legendary company around it. Through careful cultivation of the deans and judicious philanthropy, Bower secured a quasi-monopoly on Baker Scholars (the handful of top students at the Harvard Business School). Bower was not so foolish as to imagine that these scholars were of interest on account of the education they received. Rather, they were valuable because they were among the smartest, most ambitious, and best-connected individuals of their generation. Harvard had done him the favor of scouring the landscape, attracting and screening vast numbers of applicants, further testing those who matriculated, and then serving up the best and the brightest for Bower’s delectation.

Of course, management education does involve the transfer of weighty bodies of technical knowledge that have accumulated since Taylor first put the management-industrial complex in motion—accounting, statistical analysis, decision modeling, and so forth—and these can prove quite useful to students, depending on their career trajectories. But the “value-add” here is far more limited than Mom or Dad tend to think. In most managerial jobs, almost everything you need to know to succeed must be learned on the job; for the rest, you should consider whether it might have been acquired with less time and at less expense.

The best business schools will tell you that management education is mainly about building skills—one of the most important of which is the ability to think (or what the M.B.A.s call “problem solving”). But do they manage to teach such skills?

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.